From a standing start in September 2012 to revenues 'north of $40m' in 2014; the astonishing rise of Suja Juice

With HPP (high-pressure-processed) cold-pressed juices now an established part of any self-respecting retailer’s chilled beverage set, it’s easy to forget just how rapidly this category has moved from niche to mainstream, and that key players such as Suja Juice are still less than three years old.

San Diego-based Suja - which made its debut at a few Whole Foods stores in September 2012 - notched up revenues of almost $18m in its first full calendar year (2013), and is now on course to generate revenues "north of $40m"​ in 2014, the kind of growth curve most food or beverage start-ups can only fantasize about.

And it’s still barely scratching the surface when it comes to fulfilling its potential, said chief operating officer Kurt Cahill, who acknowledges that such meteoric growth cannot continue indefinitely, but says there’s still "plenty of runway​" ahead.

He told FoodNavigator-USA: “Eventually things will cap out, but​ our growth curve is definitely sustainable for the next 2-3 years at least. Retailers see these products as bringing in new dollars to the category, it's all accretive, and they are carving out more real estate for these products.”​

Indeed it’s hard to find a more compelling example of a company that has proved that shoppers are willing to pay a significant premium (up to $8.99 for a 16oz bottle) for something they feel is a superior product, even in a mature category that has been going nowhere in recent years.

To put this into context, Nielsen data collated by Wells Fargo shows that US retail sales of refrigerated, shelf-stable and frozen juice slumped 1.4%, 1.6% and 11.1% respectively in the year to October 25 while sales of HPP products from the likes of Suja, Evolution Fresh (Starbucks) and BluePrint (Hain Celestial) have been going through the roof.

Retailers can see where the growth is​

Suja juices are made by cold-pressing fresh organic and non-GMO fruits and vegetables, bottling the juice, and then pasteurizing it via HPP, which involves putting the bottles into a high-pressure chamber that is flooded with cold water and pressurized (thus the ‘cold-pressured’ moniker).

The pressure causes lethal damage to the cellular structure of bacteria, molds and yeasts. However, colors, textures, flavors and nutrients that can be damaged by conventional heat pasteurization are retained such that the HPP-treated product looks and tastes exactly like freshly-squeezed juice, but has a shelf-life of 40-75 days, as opposed to just 3-5 days for a traditional cold-pressed 'raw' juice.

“The flavor and taste of HPP juices is just incredible and tests also show that the vitamin content in our juices versus thermally processed juices is just way higher,” ​said Cahill.

You have to plan a long way ahead or you end up promising stuff you can’t deliver​

The biggest challenge for Cahill right now is managing explosive growth, and ensuring that supply can meet demand.

“There are so many moving parts,” ​he added. “If you get too focused on the selling side and you can’t support it on the processing or the sourcing side, you can run into issues.​

“You have to plan a long way ahead and understand the growing seasons, all the micro-climates, or you end up promising stuff you can’t deliver or losing all control of your cost of goods and having to import goods at three times the price. Take kale. For a while, demand massively exceeded supply, although growing cycles have now caught up again. But we contract grow it now.”​

Suja has also had to build relationships with farmers to secure exactly what it is looking for, he added: “A lot of growers are producing A-grade produce for retail that must be a certain shape and size, whereas we don’t want to pay for A-grade organic produce that we are just going to grind up to make into juice.”​

We decided to dig in with both feet and take a pretty aggressive stand​

As for manufacturing, Suja’s growth has been so rapid that it became clear fairly early on that despite the large upfront capital costs, it was worth coughing up the cash to do everything in-house, from pressing the fruits and vegetables, to bottling the juice, to the HPP process, said Cahill.

Suja was hit with a class action lawsuit in February disputing claims (that it no longer makes) that HPP-treated juices are ‘raw’. However, the case was voluntarily dismissed in May, shortly after Suja scooped the Supplier of the Year award from Whole Foods.

“We've bought two 420-liter Hiperbaric horizontal HPP pasteurizers, which is a significant investment. We’re talking about $3m for installation of one of these machines. But once it became clear that this was more than a fad, and something that is really redefining the juice category, we decided to dig in with both feet and take a pretty aggressive stand. Our first one arrived in Q1 2014 and the installation of our second one is planned for mid-December. ​

“We now have the capacity to triple our current size ​[from the existing facility].”

To finance this growth spurt, Suja has attracted some high-profile investors, from gluten-free giant Boulder Brands, which handed over more than $8m last year for a minority stake, to private equity firm Alliance Consumer Growth, which has stakes in several food & beverage brands from KRAVE Jerky to barkTHINS chocolate.

Opening a second facility on the east coast is something the company - co-founded by Jeff Church, Eric Ethans, James Brennan and Annie Lawless in spring 2012 - is currently weighing, but there are a lot of supply chain questions to answer first, said Cahill.

"A site was secured a while ago but we are still looking at options here."​

People are looking more carefully at juice labels now ​

On the product development side of things, meanwhile, a lot of work has been done to look at the nutritional profile of the products recently, he added - as posh juice is as sugary as the more prosaic variety - and many consumers are scrutinizing labels more carefully, especially as sugar replaces fat as public enemy #1 in the food policy debate.

“We have looked at a lot at calories and sugar and that's why all the ‘green’ products have been doing so well lately as they have less sugar, than say, a straight orange juice,” ​said Cahill.

1 comment

Rockin' Revenues

Why are Suja's revenues rockin'? They understood their educated audience, followed a trend, and provided a need.
Their juices are pasteurized using HPP. The educated consumer is looking for non and alternative pasteurization process.I believe pasteurization is and will continue to be a hot trend and a market niche.